Arizona Supreme Court holds that a defendant seeking to set aside a default judgment may rely on the existing record to establish that there is a “meritorious defense” under Rule 60.

After a defendant failed to appear, the trial court entered a default judgment for the plaintiff. Although evidence in the record suggested that the damages amount was excessive, the default judgment included significant damages. The defendant later filed a Rule 60 motion to vacate the judgment. The trial court agreed, noting the fairness of the damages amount. The court of appeals reversed and reinstated the judgment because the company had not presented a “meritorious defense.” The Arizona Supreme Court accepted review to clarify Arizona’s Rule 60 standards, which the Court describes as “not a model of clarity or consistency.”

Under Rule 60(b) (until recently codified at Rule 60(c)), a defendant may file a motion to set aside a judgment for any of six reasons. The sixth (Rule 60(b)(6)) is a “very broadly worded” catchall category: “any other reason justifying relief.” To obtain relief under Rule 60(b)(6), the defendant must assert some reason other than the first five reasons and must “assert a meritorious defense.” Although the defendant cannot rely on mere speculation, to assert a meritorious defense, a defendant must only present “some legal justification for the exercise of the power” and “some substantial evidence to support it.” Rejecting possible interpretations of earlier cases, the Court held that a defendant does not need to present evidence outside of the existing record to establish a meritorious defense. It is sufficient if the defendant relies on evidence that appears in the record. Thus, when evidence in the record suggests that a default judgment’s damages amount is “possibly excessive” the trial court has discretion to vacate the judgment. The Court therefore reversed the case again, sending it back the trial court to be heard on the merits.